FEMA to deny federal funding to states that cut contracts with Israeli companies

The Trump administration has threatened to withhold nearly $2 billion in federal funding for natural disaster response to cities and states that boycott Israeli companies over its war with Hamas, according to a report.

The Department of Homeland Security’s Federal Emergency Management Agency announced in grant notices sent to states late last week that they will have to pledge not to shutter contracts with Israeli companies to receive money to cover expenses associated with responding to hurricanes, fires, and floods.

The stipulations noted in the documents require states and cities to certify that they will not rescind “commercial relations specifically with Israeli companies” in light of the casualty-heavy war that has created dire humanitarian conditions in the Gaza Strip, Reuters reported Monday afternoon.

“DHS will enforce all anti-discrimination laws and policies, including as it relates to the [Boycott, Divestment, and Sanctions] movement, which is expressly grounded in antisemitism,” a DHS spokesperson said in a statement to Reuters.

The pot of funding under close watch is $1.9 billion meant to cover state and local costs of search and rescue equipment, emergency manager salaries, and back-up power systems in case of a natural disaster.

The move is the White House’s latest effort to crack down on states that support the Boycott, Divestment, Sanctions (BDS) movement, which grew in popularity following Hamas’ attack on Israel in October 2023. Following the attack, Israel invaded Gaza and has been at war for nearly two years.

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In addition, FEMA will also require major cities to agree to the stipulations and is holding hostage $553 million in funding to prevent terrorism in dense areas unless those cities agree. New York City risks losing $92 million in counterterrorism funding if it chooses to end contracts with Israeli entities.

FEMA did not respond to a request for comment.